Commercial properties in the UK saw their values rise by 6.8 per cent over the past ten months, a new report reveals.
According to fundweb.co.uk, the report from the Investment Property Databank (IPD) shows commercial property values increased one per cent last month, meaning the market has seen nothing but rises so far during 2014.
Overall, real estate returns surged by 1.6 per cent in March. This means that commercial property is outperforming other investment sectors. For example, bond returns only saw a 0.1 per cent gain and stock earnings actually fell by 2.7 per cent, reports property-magazine.eu.
The top performing property sector is currently industrial, as it returned 2.2 per cent last month. However the office sector isn’t far behind, with revenues reaching 1.9 per cent. The retail sector remains to be the slowest to recover, only seeing returns of 1.1 per cent in March.
F&C UK Property manager, Guy Clover, predicts the lack of new buildings will push the UK’s commercial sector into double-digit returns this year.
“Property remains attractive relative to other assets classes; a real asset currently providing consistent income returns,” he explains. “Fundamentals are improving and our forecast for UK property looks healthy over the next five years.
“We expect stable income returns of more than five per cent per annum during this five-year period, with capital and rental growth to boost total returns up close to nine per cent per annum.”
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.